1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 United States District Court Northern District of California UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION IN RE: PERSONALWEB TECHNOLOGIES, LLC, ET AL. PATENT LITIGATION Case No. 18-md-02834-BLF ORDER GRANTING IN PART AND DENYING IN PART AMAZON’S MOTION FOR SUMMARY JUDGMENT [Re: ECF 315] PersonalWeb Technologies LLC and Level 3 Communications, LLC (collectively, “PersonalWeb”) allege patent infringement by Amazon.com, Inc. and Amazon Web Services, Inc. (collectively, “Amazon”), and separately by dozens of customers of Amazon, related to the customers’ use of Amazon’s S3 in connection with downloading files from S3. However, PersonalWeb previously sued Amazon in the Eastern District of Texas (“the Texas Action”) for infringement of the same patents by the same product. Amazon now seeks summary judgment under claim preclusion and the related Kessler doctrine, arguing that PersonalWeb’s current lawsuits are barred by the prior action. PersonalWeb counters that claim preclusion does not apply because the instant litigation involves a different feature of S3 than what was accused in the Texas Action. PersonalWeb further argues that the instant litigation does not involve the same parties or their privies and that the previous litigation did not end in a final judgment on the merits. The Court has considered Amazon’s motion for summary judgment of Amazon’s declaratory judgment claims and defenses under the claim preclusion and Kessler doctrines, ECF No. 315 (“Mot.”), PersonalWeb’s opposition, ECF No. 334 (“Opp.”), Amazon’s reply, ECF No.
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
IN RE: PERSONALWEB TECHNOLOGIES, LLC, ET AL. PATENT LITIGATION
Case No. 18-md-02834-BLF ORDER GRANTING IN PART AND DENYING IN PART AMAZON’S MOTION FOR SUMMARY JUDGMENT
[Re: ECF 315]
PersonalWeb Technologies LLC and Level 3 Communications, LLC (collectively,
“PersonalWeb”) allege patent infringement by Amazon.com, Inc. and Amazon Web Services, Inc.
(collectively, “Amazon”), and separately by dozens of customers of Amazon, related to the
customers’ use of Amazon’s S3 in connection with downloading files from S3. However,
PersonalWeb previously sued Amazon in the Eastern District of Texas (“the Texas Action”) for
infringement of the same patents by the same product.
Amazon now seeks summary judgment under claim preclusion and the related Kessler
doctrine, arguing that PersonalWeb’s current lawsuits are barred by the prior action. PersonalWeb
counters that claim preclusion does not apply because the instant litigation involves a different
feature of S3 than what was accused in the Texas Action. PersonalWeb further argues that the
instant litigation does not involve the same parties or their privies and that the previous litigation
did not end in a final judgment on the merits.
The Court has considered Amazon’s motion for summary judgment of Amazon’s
declaratory judgment claims and defenses under the claim preclusion and Kessler doctrines, ECF
350 (“Reply”), and PersonalWeb’s sur-reply, ECF No. 354-1 (“Sur-reply”).
For the reasons discussed below, Amazon’s motion for summary judgment is GRANTED
IN PART and DENIED IN PART.
I. BACKGROUND
A. Procedural Background
Beginning in January 2018, PersonalWeb filed numerous lawsuits against Amazon’s
customers alleging infringement related to their use of Amazon S3. See, e.g., Case No. 18-cv-
00149-BLF, ECF No. 1 ¶ 56 (“Defendant has utilized . . . both hardware and software hosted on
the Amazon S3 hosting system.”). On February 5, 2018, Amazon filed a complaint for declaratory
judgment against PersonalWeb, seeking to preclude PersonalWeb’s infringement actions against
Amazon’s customers. ECF No. 18-cv-767-BLF (“Amazon DJ Action”). On February 27, 2018,
PersonalWeb filed a motion for transfer and consolidation of pretrial proceedings before the
Judicial Panel on Multidistrict Litigation (JPML). MDL No. 2834, Dkt. No. 1. On June 7, 2018,
the JPML transferred and assigned to this Court all then-existing cases comprising this MDL. ECF
No. 1. Following consolidation of the MDL, additional cases were related or transferred to this
Court. See ECF Nos. 23, 42, 44, 158, 160, 311.
On September 26, 2018, this Court ordered that it would proceed with the Amazon DJ
Action first. ECF No. 157. At that time, the Court stayed the proceedings in the “customer cases”
(any case comprising this MDL other than the Amazon DJ Action). Id. On October 3 and 4, 2018,
PersonalWeb filed amended complaints in the customer cases and an amended counterclaim in the
Amazon DJ Action. ECF Nos. 175-257.
During the November 2, 2018 Case Management Conference, the Court raised the concern
that a verdict against Amazon in the Amazon DJ Action may leave unresolved issues as to the
liability of the other defendants in the customer cases. ECF No. 300 at 4. After considering the
parties’ oral and written statements, the Court designated PersonalWeb v. Twitch, 18-cv-05619-
BLF as a representative customer case. Order Re Representative Customer Case, ECF No. 313.
PersonalWeb represented to the Court that PersonalWeb would not be able to proceed against the
defendants in the other customer cases if it lost against Twitch. Nov. 2, 2018 Case Mgmt. Conf.,
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ECF No. 300 at 6. The Court ordered the stay lifted as to Twitch and ordered that Twitch shall
participate in all proceedings. Order Re Representative Customer Case, ECF No. 313 at 3.
Accordingly, for purposes of discussing Amazon’s motion for summary judgment, the Court relies
on PersonalWeb’s pleadings against Twitch as representative of PersonalWeb’s pleadings in the
customer cases. ECF No. 198 (“Twitch Compl.”). The Court also refers to the operative complaint
in the Amazon DJ Action. See 18-cv-767-BLF, ECF No. 36 (“DJ Compl.”).
B. Factual Background Regarding the Technology
1. Patents-In-Suit
In the earliest complaints filed in the customer cases, PersonalWeb alleged infringement of
U.S. Patent Nos. 5,978,791 (the “’791 patent”), 6,928,442 (the “’442 patent”), 7,802,310 (the
“’310 patent”), 7,945,544 (the “’544 patent”), and 8,099,420 (the “’420 patent”) (collectively,
“patents-in-suit”).1 See, e.g., Case No. 18-cv-00149-BLF, ECF No. 1 ¶ 1. All five patents share a
specification and each claims priority to a patent filed on April 11, 1995. All of the patents-in-suit
have expired, and PersonalWeb’s allegations are directed to the time period prior to their
expiration. Twitch Compl. ¶ 18. PersonalWeb has dropped the ‘791 patent from the operative
complaints in the customer cases and its counterclaim against Amazon; however, Amazon’s FAC
in the DJ Action still includes the ‘791 patent. DJ. Compl. ¶¶ 49-56.
In its complaint, PersonalWeb represents that the patents-in-suit address the problem of
how to efficiently name and identify files on a computer network. Twitch Compl. ¶ 11. The patent
specification describes the alleged problem that the patents address: “[t]he same [file] name in two
different [folders] may refer to different data items, and two different [file] names in the same
[folder] may refer to the same data item.” ‘442 Patent at 2:15-17 (available at ECF No. 315-3).
PersonalWeb’s complaint explains that the patents-in-suit involve using a cryptographic hash
function to produce a content-based “True Name” identifier for a file, which “ensure[s] that
identical file names refer[] to the same data, and conversely, that different file names refer[] to
1 PersonalWeb does not allege infringement of the ‘544 patent in its counterclaim against Amazon. ECF No. 257. However, Amazon includes the ‘544 patent in its complaint in the DJ Action. DJ Compl. at 18.
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different data.” Twitch Compl. ¶¶ 13, 15-17. For a small file, “[a] True Name is computed using a
[hash] function . . . which reduces a data block . . . to a relatively small, fixed size identifier, the
True Name of the data block, such that the True Name of the data block is virtually guaranteed to
represent the data block B and only data block B.” ‘442 Patent at 12:58-63. Larger files are split
into smaller segments. The hash function is applied to each segment, and the resulting values are
strung together into an indirect data item. The True Name of this indirect data item is then
computed. This becomes the True Name of the larger file. Id. at 14:16-35.
The summary of the invention describes multiple uses for these True Names, including (1)
to avoid keeping multiple copies of a given data file, regardless of how files are named; (2) to
avoid copying a data file from a remote location when a local copy is already available; (3) to
access files by data name without reference to file structures; (4) to maintain consistency in a
cache of data items and allow corresponding directories on disconnected computers to be
resynchronized with one another; (5) to confirm whether a user has a particular piece of data,
regardless of its name; and (6) to verify that data retrieved from a remote location is the intended
data. ‘442 Patent at 3:49-4:37. The patents-in-suit are directed to various specific aspects of this
system.
2. Background Regarding Website Functions
In both the Twitch case and Amazon DJ Action, PersonalWeb’s infringement allegations
involve website cache management. PersonalWeb summarizes the following relevant background
regarding website functioning in the Twitch Complaint. Typically, a “webpage base file” includes
text, formatting, and links to other web content such as images (“asset files”) that make up part of
the webpage. Twitch Compl. at ¶ 20. An individual’s web browser retrieves a webpage base file
from a remote web server, and then the individual’s web browser retrieves the referenced asset
files from the same or different servers. Id. at ¶ 22. The web browser retrieves a webpage base file
or asset file by making a “GET” request to a web server using the Hypertext Transfer Protocol
(“HTTP”). Id. The web server may respond to a GET request with a response that includes the
requested content and may include other information or instructions. Id. In order to improve the
speed of retrieving webpages, a web browser can store a webpage base file and related asset files
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in a “cache” on the local computer running the browser. Id. at ¶ 24. The web browser can
subsequently use cached versions of the webpage or asset file, rather than having to download the
same files repeatedly over the Internet. Id.
In addition to these local caches, files are frequently cached on “intermediate” servers. Id.
at ¶ 25. When computers communicate on the Internet, they typically do so through a chain of
intermediate servers. Like the local cache of a file, an intermediate server can use its cache to
deliver files downstream, rather than needing to repeatedly make upstream requests for the same
files from the originating server. A webserver can include a “cache-control” header along with an
asset file. Id. at ¶ 26. This cache-control header tells downstream intermediate servers and web
browsers whether and for how long an asset file may be used, and when the asset file should be
refreshed.
Typically, website operators want a browser or intermediate server to use cached files as
long as the files have not changed. Id. at ¶¶ 27-28. By using cached files, downstream individuals
can load webpages quicker, and a web server saves bandwidth by not delivering the same data
repeatedly. However, website operators want a browser or intermediate server to stop using a
cached file as soon as the file has changed. Id. The challenge, then, is how to tell a browser when
the file has changed such that the browser should download a new version of the file.
PersonalWeb alleges that the “True Name” system described by its patents provide a solution to
this problem of forcing a browser to download a new version of a file only when the file has
changed. That solution is at the heart of the instant litigation.
3. Background Regarding Amazon S3
Amazon’s Simple Storage Service (S3) provides web-based storage, which customers
access using an Application Programming Interface (API) built according to the HTTP
specification. Markle Decl., ECF No. 315-18 ¶¶ 3-4. For example, customers use an HTTP “GET”
command to request a file and an HTTP “PUT” command to upload a file. Id. ¶ 4.
S3 generates “ETag” headers for the objects that it stores. Id. ¶ 9. These ETags are
essentially extra bits of information that describe a file. For most objects, S3 generates the ETag
using the MD5 hash algorithm. This ensures that when a file’s contents change, the ETag also
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changes. Id. Clients can use this ETag functionality for cache management. When a client first
retrieves an object from S3, it can store it in a local cache. Id. ¶ 10. If the client subsequently
requests the same file, S3 can compare the ETag for the file stored on S3 with the ETag for the
same file stored in the client’s cache. If the values are the same, “S3 saves time and network
bandwidth by responding with a status code” to inform the client that the file has not been
modified. Id. ¶ 10. If the ETags do not match, S3 will instruct the client to download the newer
version of the file. Id. ¶ 10.
Multipart upload (“MPU”) is one feature of S3. Id. ¶ 6. MPU allows an S3 customer to
upload a large object, like a video file, as a series of parts. Id. Once all the parts have been
uploaded, S3 can assemble them into a single file for storage. Id. MPU generates ETags for each
uploaded part as well as for the completed object. Id. ¶ 9. In the MPU context, S3 uses ETags to
verify the integrity of the uploaded data.
C. The Complaint in the Texas Action
On December 8, 2011, PersonalWeb sued Amazon and its customer DropBox in the
Eastern District of Texas, alleging infringement of eight related patents by Amazon’s S3 service.
the same where the differences between them are . . . unrelated to the limitations in the claim of
the patent.” Acumed LLC v. Stryker Corp., 525 F.3d 1319, 1324 (Fed. Cir. 2008) (internal
quotations and citation omitted).
As to the first factor, PersonalWeb asserted infringement of the ‘791, ‘442, ‘310, and ‘544
patents in the Eastern District of Texas Action. PersonalWeb did not previously assert
infringement of the ‘420 patent. In its briefing, Amazon argues that the ‘420 patent “makes no
difference as a matter of law” because it is a “continuation of the twice-asserted ‘442 patent,
claims priority to the same patent application as [the other patents-in-suit], shares the same
specification with the other [patents-in-suit], and is limited by a terminal disclaimer.” Mot. at 4. At
the hearing, counsel for PersonalWeb stated on the record that PersonalWeb does not contest that
the ‘420 patent alleges the same claims at issue in the Texas Action. Trans., ECF No. 376 at 75.
Accordingly, the Court finds that for purposes of claim preclusion, the scope of the ‘420 patent is
essentially the same as the previously asserted ‘442 patent. See SimpleAir, Inc. v. Google LLC,
884 F.3d 1160, 1167 (Fed. Cir. 2018) (“[W]here different patents are asserted in a first and second
suit, a judgment in the first suit will trigger claim preclusion only if the scope of the asserted
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patent claims in the two suits is essentially the same.”).
As to the second factor, it is undisputed that the infringement contentions in Category 3
involve the use of Amazon S3, the same product in dispute in the Texas Action. However, the
parties dispute (1) the scope of the contentions in the previous litigation and (2) whether claim
preclusion applies to different features of the same product.
a. Scope of the Contentions in the Previous Litigation
PersonalWeb argues that claim preclusion does not apply because “[t]he Texas
infringement contentions were very specific to the MPU features of S3, not to S3 in general.” Opp.
at 11. In particular, PersonalWeb argues that the conditional HTTP GET request used in the cache
control feature central to the instant MDL is not used in MPU. Opp. at 5. Amazon argues that the
complaint in the Texas Action involved the entire S3 product. Reply at 4. Moreover, Amazon
argues that PersonalWeb’s infringement contentions in the Texas Action included the same use of
GET and ETags that it accuses in the instant litigation, and that PersonalWeb sought discovery
related to these commands in the Texas Action. Mot. at 13.
PersonalWeb’s argument regarding the scope of the Texas Action is not persuasive. The
complaint in the Texas Action alleged that Amazon infringed “by its manufacture, use, sale,
importation and/or offer for sale of . . . Amazon Simple Storage Service.” Texas Compl., ECF No.
315-2 ¶ 28. The complaint does not discuss any specific features of S3, does not include the words
“upload” or “download” anywhere, and does not limit PersonalWeb’s allegations to any specific
features of S3. This evidence alone is sufficient for this Court to conclude that the allegations in
the Texas Action involved all of S3, not just a particular feature. See Mars Inc., 58 F.3d at 619-20
(looking to the prior complaint to determine whether two cases related to the same set of
transactions for purposes of claim preclusion).
Moreover, PersonalWeb’s enumerated patent claims in the Texas Action included claims
directed to downloading. ECF No. 340-2 at 1. PersonalWeb also made discovery requests in the
Texas Action including the use of GET operations related to downloading. ECF No. 350-6
(discovery request related to “conditional matching GET Object operation, using an eTag, such as
“If-Match” and “If-None-Match.”); ECF No. 350-7 at 90:19-23, 91:5-8 (deposition testimony on
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conditional GET commands). The Court finds that this evidence supports Amazon’s argument that
the Texas Action included the specific functionality accused in the instant case.
At the hearing, PersonalWeb offered two arguments to get around this evidence. First,
PersonalWeb argued that there are disputed issues of material fact as to whether the infringement
contentions in the Texas Action included use of the HTTP GET command. Trans., ECF No. 376 at
51. PersonalWeb cited the declaration of Mr. Hadley, who stated that the use of “conditional
HTTP GET requests containing ETags . . . was not a part of the Texas Action and PersonalWeb
made no contention that such uses infringed any PersonalWeb patent.” Hadley Decl., ECF No.
337 ¶ 4. Mr. Hadley explained that “[t]he references to conditional HTTP GET requests in the
[Texas] Infringement Contentions” were related to showing that conditional HTTP GET requests
are analogous to MPU. Hadley Decl., ECF No. 337 ¶ 4.
The Court finds that Mr. Hadley’s declaration does not create a genuine dispute of material
fact because the declaration is “uncorroborated and self-serving.” Villiarimo v. Aloha Island Air,
Inc., 281 F.3d 1054, 1061 (9th Cir. 2002). Mr. Hadley’s recollection of the gravamen of the Texas
Action does not dispute the plain meaning of the Texas Complaint, infringement contentions, and
discovery requests. Viewing the evidence in the light most favorable to PersonalWeb, the evidence
shows that the discovery and infringement contentions in the Texas Action primarily involved
MPU but also encompassed the HTTP GET (download) command. No reasonable jury could
conclude otherwise. See Scott v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell
two different stories, one of which is blatantly contradicted by the record, so that no reasonable
jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a
motion for summary judgment.”). Mr. Hadley’s posthoc recollection of his litigation strategy is
simply insufficient to place this issue in dispute.
Second, PersonalWeb argues that the scope of the Texas Action should be limited to what
was included in the infringement contentions, and not the complaint. Trans., ECF No. 376 at 44-
45. Even if the Court agreed with PersonalWeb, the Texas infringement contentions included the
HTTP GET command, and thus PersonalWeb’s argument fails on its own terms. Moreover, the
case that PersonalWeb cites does not support its argument. Contrary to PersonalWeb’s description,
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Wowza involved different versions of the same product. See Adobe Sys. Inc. v. Wowza Media Sys.,
LLC, 72 F. Supp. 3d 989, 995 (N.D. Cal. 2014). During the prior case in Wowza, the court struck
Adobe’s “RTMP Enhanced” infringement theory because the theory was added to an expert report
but was not in the infringement contentions. Id. at 991. In the second case, the court held that the
RTMP Enhanced theory was not barred by claim preclusion because the “RTMP Enhanced theory
[was] asserted against products released after the filing of the infringement contentions in Wowza
I.” Id. at 995. Thus, the RTMP Enhanced theory was not barred in Wowza II because it related to
new products, not as PersonalWeb would have it because the court limited its claim preclusion
analysis to the infringement contentions.
In sum, the Court finds that both the complaint and the infringement contentions in the
Texas Action indisputably support the Court’s conclusion that the Texas Action asserted
infringement against all of S3 and was not limited only to MPU.
b. Different Features of the Same Product
Even if the Texas Action involved all of S3, PersonalWeb argues that claim preclusion
does not apply because “the accused features of S3 here and in the Texas Action were completely
different.” Opp. at 12. PersonalWeb argues that “MPU is priced separately from the downloading
and serving features of S3.” Opp. at 13. Amazon argues that “multipart upload is a feature of S3,
not a separate product, and a feature that uses ETags no less so than single-part upload files.” Mot.
at 12.
As an initial matter, the Court finds that there is no genuine dispute of material fact as to
whether multipart upload is a feature of S3, not a separate product. The declaration that
PersonalWeb cites explains that S3 customers are charged for each individual transaction
involving uploading or downloading objects and for retaining storage. Markle Decl., ECF No.
341-11 at 97-99, 101. At most, this evidence shows that Amazon charges individual prices for
specific transactions within S3, not that MPU is a separate product.
The Court notes that PersonalWeb does not argue that S3 has changed in any way that is
meaningful to PersonalWeb’s infringement contentions, and Amazon does not argue that the
differences between multipart upload and cache control are “unrelated to the limitations in the
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claim of the patent.” Acumed LLC, 525 F.3d at 1324. Accordingly, the issue before the Court is
the legal question of whether claim preclusion applies where the later suit involves different
features of the same product as the original suit.
Amazon has pointed the Court to a single case involving similar facts. See ViaTech Techs.,
Inc. v. Microsoft Corp., No. 17-570, 2018 WL 4126522 (D. Del. Aug. 28, 2018). The court there
explained:
Plaintiff accused Windows alone of directly infringing the ’567 patent in the First
Action. Now, reading the Amended Complaint in the manner most favorable to
Plaintiff, Plaintiff’s direct infringement claim in the Second Action includes not
only Windows, but other items, such as media, as well. Plaintiff has not alleged that
adding media changes Windows, nor alleged that Windows has changed since the
First Action. Given that Plaintiff previously asserted that Windows infringed the
’567 patent, Plaintiff cannot once again accuse Windows of infringing the ’567
patent, but argue that other items, like media, are necessary for infringement.
Likewise, Plaintiff cannot repeatedly assert its patent against different parts of
Windows in separate suits, even if one accused part is on the left-hand side of
Windows and the other is on the right-hand side, so to speak.
Id. at *3 (internal citations omitted).
ViaTech is consistent with the doctrine of claim splitting. “It is well established that a party
may not split a cause of action into separate grounds of recovery and raise the separate grounds in
successive lawsuits.” Mars Inc., 58 F.3d at 619. “A main purpose behind the rule preventing claim
splitting is to protect the defendant from being harassed by repetitive actions based on the same
claim.” Clements v. Airport Auth. of Washoe Cty., 69 F.3d 321, 328 (9th Cir. 1995) (internal
quotation and citation omitted). In the patent infringement context, the Federal Circuit has
explained that “claim preclusion bars both claims that were brought as well as those that could
have been brought.” Brain Life, 746 F.3d at 1053 (emphasis in original).
PersonalWeb cites Young Engineers, Inc. v. U.S. Int’l Trade Comm’n., 721 F.2d 1205,
1316 (Fed. Cir. 1983), which states the unremarkable proposition that “claim preclusion [does not]
apply to conduct of a different nature from that involved in the prior litigation.” PersonalWeb
argues that “[n]one of Amazon’s cases suggest that the commercial packaging of different features
or aspects of accused devices has any bearing whatsoever on whether they are part of the ‘same
transaction’ for claim preclusion purposes.” Opp. at 13.
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PersonalWeb’s argument is unpersuasive. PersonalWeb fails to cite any cases that support
its contention that infringement allegations related to different features of the same product give
rise to separate causes of action. The Court finds nothing in the relevant Federal Circuit precedent
to support PersonalWeb’s argument. See, e.g., Acumed LLC, 525 F.3d at 1324 (“[O]ne of the
essential transactional facts giving rise to a patent infringement claim is the structure of the device
or devices in issue. . . . Adjudication of infringement is a determination that a thing is made, used
or sold without authority under the claim(s) of a valid enforceable patent.” (emphasis added)
(internal quotations and citations omitted)). The doctrine against claim splitting applies with full
force here. Accordingly, the Court concludes that the fact that this suit allegedly involves a
different feature of S3 from the Texas Action makes no difference to whether claim preclusion
applies.
4. Post-Judgment Claims of Infringement
Having concluded that claim preclusion applies to the instant case, the Court now turns to
Amazon’s argument that claim preclusion applies “through the expiration of the patents.” Mot. at
14. As a fallback, Amazon argues that PersonalWeb’s claims are barred at least through the date of
final judgment in the Texas Action. Reply at 10. PersonalWeb contends that claim preclusion only
applies up to the date of its amended complaint in the Texas Action. Opp. at 15. The Court
concludes that claim preclusion bars PersonalWeb’s claims through the date of the final judgment
in the Texas Action.
Recent Federal Circuit case law is conclusive on this point. In Mentor Graphics Corp. v.
EVE-USA, Inc., 851 F.3d 1275, 1301 (Fed. Cir. 2017) the court held that “claim preclusion does
not bar a patentee from bringing infringement claims for acts of infringement occurring after the
final judgment in a previous case.” The court explained that “for products made or sold after the
previous actions, it [does] not matter whether the new products [are] essentially the same as the
previously accused products. . . . [T]he patentee could not have brought those claims in the prior
case.” Id. at 1299 (internal quotation and citation omitted); see also Asetek Danmark A/S v. CMI
USA Inc., 852 F.3d 1352, 1365 (Fed. Cir. 2017) (claim preclusion does not apply to post-dismissal
conduct, “even if all the conduct is alleged to be unlawful for the same reason”); Brain Life, 746
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F.3d at 1054 (claim preclusion does not bar infringement claims arising from “acts occurring after
final judgment was entered in the first suit”).
Amazon argues that there is an intra-circuit split within the Federal Circuit as to whether
claim preclusion bars infringement claims arising from acts occurring after the date of the first
judgment. Mot. at 14. Amazon argues that, until the Federal Circuit resolves the alleged conflict
en banc, Nystrom v. Trex Co., Inc., 580 F.3d 1281 (Fed. Cir. 2009) is the controlling precedent. In
Nystrom, the Federal Circuit held that claim preclusion barred the patentee’s suit as to products
that “reached the market after the filing date of the original . . . complaint.” Id. at 1284. However,
the Federal Circuit has since clarified that “[a]lthough the Nystrom court characterized its analysis
as falling under the general rubric of res judicata or claim preclusion, the principle that the court
applied was” that of issue preclusion. Aspex, 672 F.3d at 1343. Accordingly, this Court will follow
the Federal Circuit’s own interpretation of Nystrom as not conflicting with more recent Federal
Circuit precedent directing that claim preclusion only applies to acts of infringement that pre-date
the first judgment.
PersonalWeb argues that claim preclusion can only apply up to the date of the amended
complaint in the Texas Action because PersonalWeb was not required to assert any cause of action
that it acquired during the pendency of the Texas Action, and that any such cause of action is not
barred by claim preclusion. Opp. at 16. PersonalWeb submits that Gillig, Aspex, and Dow
Chemical support its argument. Opp. at 15; Trans., ECF No. 376 at 38-42. PersonalWeb’s
argument that it was not required to assert any new cause of action is true as far as it goes, but that
does not help PersonalWeb here. As discussed above, this case involves the same cause of action
as the Texas Action. The cases that PersonalWeb cites do not say otherwise.
Gillig, which did not involve patent infringement claims, states that “The res judicata
doctrine does not apply to new rights acquired during the action which might have been, but which
were not, litigated.” Gillig v. Nike, Inc., 602 F.3d 1354, 1363 (Fed. Cir. 2010) (citation omitted).
Quoting this language, Aspex explains that “[i]n patent cases, this court has applied the general
rule that res judicata does not bar the assertion of ‘new rights acquired during the action which
might have been, but were not, litigated.’” Aspex, 672 F.3d at 1345 (quoting Gilig, 602 F.3d at
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1363). In Aspex, the Federal Circuit concluded that claim preclusion does not apply to products
that were not in existence at the time of the filing of the prior complaint. See id. Unlike Aspex, the
instant case does not involve new products that were not in existence at the time of the filing of the
prior complaint. Moreover, Aspex explicitly held that claim preclusion could apply to new
products introduced between the filing of the complaint and the judgment in the previous case, if
the patentee elected to have those products included in the previous action. See id. Thus, Aspex
and Gillig do not support the conclusion that claim preclusion only applies up to the date of the
complaint in the prior action.
At the hearing, PersonalWeb specifically directed the Court to the holding in Dow
Chemical, Trans., ECF No. 376 at 39, a case it had cited only once in a string cite in its papers,
Opp. at 17. In Dow Chemical, the Federal Circuit reiterated that “traditional notions of claim
preclusion do not apply when a patentee accuses new acts of infringement, i.e., post-final
judgment, in a second suit.” Dow Chem. Co. v. Nova Chems. Corp., 803 F.3d 620, 627 (quoting
Brain Life, 746 F.3d at 1056) (emphasis added). In the language quoted by counsel for
PersonalWeb, the Dow Chemical court applied the general rule on claim preclusion to the specific
facts of that case to explain why claim preclusion did not apply from a previous judgment to a
period of supplemental damages. Id. (“Here, the bulk of the supplemental damages accrued after
the [previous judgment], and it is clear that claim preclusion also does not apply to damages
accruing after the filing of the complaint and not the subject of the first judgment.”). Aspex and
Dow Chemical are both consistent with Federal Circuit precedent instructing that claim preclusion
in patent infringement cases applies up to the date of the judgment in the previous case, at least
when the same product is involved in both cases.
5. Summary
For the reasons discussed above, the Court finds that claim preclusion applies because the
Texas Action ended in a final judgment, involved the same parties or privies, and involved the
same cause of action. Claim preclusion applies to PersonalWeb’s claims up to the date of the final
judgment in the Texas Action.
C. Kessler Doctrine
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Amazon contends that the Kessler doctrine bars all of PersonalWeb’s S3 claims,
“including claims against Amazon customers for conduct occurring after the date of the Texas
judgment.” Mot. at 15. Amazon argues that the dismissal with prejudice in the Texas Action
“created a trade right [under Kessler] that conferred upon Amazon and its customers the status of
non-infringers and upon S3 the status of a non-infringing product.” Mot. at 17. PersonalWeb
argues that Kessler is “rooted in . . . issue preclusion,” and accordingly requires that the question
of infringement was actually litigated in the prior case. Trans., ECF No. 376 at 65; Opp. at 19.
Under issue preclusion rules, PersonalWeb argues that the dismissal with prejudice in the previous
case is insufficient to trigger preclusion under the Kessler doctrine. Id. In addition, PersonalWeb
argues that Kessler does not apply to the cache-busting feature of S3 because that feature has
never been “held to be non-infringing by any court.” Opp. at 20. For the reasons discussed below,
the Court finds that the Kessler doctrine bars PersonalWeb’s post-judgment infringement claims
against Amazon and its customers related to use of S3.2
In Kessler v. Eldred, 206 U.S. 285, 288 (1907), the Supreme Court held that a prior non-
infringement judgment conferred upon the manufacturer “the right to manufacture, use, and sell”
the adjudged non-infringing product. Accordingly, the Court concluded that “it is Kessler’s right
that those customers should, in respect of the articles before the court in the previous judgment, be
let alone by [the patentee].” Id. at 289. The Federal Circuit has recently affirmed the continued
vitality of the Kessler doctrine, explaining that “the Court granted Kessler a limited trade right to
continue producing, using, and selling the [adjudged non-infringing product] . . . even when the
acts of infringement occurred post-final judgment and even when it was third parties who
allegedly engaged in those acts of infringement.” Brain Life, 746 F.3d at 1056. The Federal Circuit
explained that “[t]he Kessler doctrine fills the gap between [claim preclusion and issue preclusion]
doctrines.” Id.
2 At the hearing, Amazon acknowledged that they have not seen a case specifically addressing whether Kessler applies to claims arising prior to the final judgment in the previous case. Trans., ECF No. 376 at 71. Because this Court concludes that claim preclusion bars PersonalWeb’s claims against both Amazon and its customers prior to the previous judgment, this Court does not need to consider whether Kessler also applies to that time period.
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The Court finds persuasive the only case that the parties have identified that squarely
addresses the applicability of Kessler based on a prior dismissal with prejudice. In Molinaro v.
Am. Tel & Tel. Co., 460 F. Supp. 673, 675 (E.D. Penn. 1978), the previous suit was dismissed with
prejudice as a sanction for failure to comply with discovery orders. The Molinaro court explained
that the “analysis of the applicability of the Kessler doctrine is not altered by the fact that the
infringement question in the instant case was not actually litigated in the [prior] suit.” Id. at 676.
Molinaro is consistent with Federal Circuit precedent, which explains that the Kessler doctrine
applies to claims that “could have been brought”—and were necessary not adjudicated—in the
prior action. See Brain Life, 746 F.3d at 1059 (method claims were not actually litigated in the
prior action and thus were not barred by issue preclusion but were barred by Kessler).
PersonalWeb seeks to distinguish Molinaro on two grounds, neither of which is
persuasive. First, PersonalWeb fails to explain how the fact that Molinaro was based on a
dismissal entered as a sanction for failure to comply with discovery orders makes any difference to
the preclusive effect of the dismissal. Opp. at 19. At the hearing, PersonalWeb argued that a
judicial sanction of dismissal should be treated differently than the parties’ voluntary stipulation to
dismiss the case because of the punitive aspect of the sanction. Trans., ECF No. 376 at 62-63.
Other than the emotional appeal of that distinction, PersonalWeb points to no authority or
anything rooted in the Kessler doctrine to support its argument.
Second, PersonalWeb’s characterization of Molinaro as “a non-controlling 50 year-old
district court case,” Opp. at 19, is inconsistent with the Federal Circuit’s 2015 opinion citing
Molinaro approvingly. See Speedtrack, Inc. v. Office Depot, Inc., 791 F.3d 1317, 1326 (2015).
Although Speedtrack cited Molinaro for the specific proposition that a customer could invoke the
Kessler doctrine, nothing in Speedtrack suggested that the Federal Circuit disagreed with
Molinaro as to the preclusive effect of a dismissal with prejudice.
In its briefing and at the hearing, PersonalWeb cited numerous additional cases that it
argues require actual adjudication of noninfringement in order for Kessler to apply. Trans., ECF
No. 376 at 68; Opp. at 19. As discussed above, neither Brain Life nor Speedtrack supports
PersonalWeb’s argument. In MGA, Inc. v. General Motors Corp., 827 F.2d 729, 734 (Fed. Cir.
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1987), the Federal Circuit applied Kessler as the equivalent of nonmutual defensive issue
preclusion. However, nothing in MGA limits Kessler to the issue preclusion context, and Brain
Life cites MGA approvingly for its discussion of Kessler. See Brain Life, 746 F.3d at 1056-57.
None of the additional cases that PersonalWeb cites support PersonalWeb’s argument that Kessler
requires actual adjudication of non-infringement. See Mentor Graphics, 851 F.3d at 1301 (Kessler
does not apply when previous case ended with grant of a license to the alleged infringer); Foster v.
